Difference between Cadastral Value and Market Value

When you think about the value of a home, it’s easy to get confused with terms like cadastral value and market value. Although both are concepts that refer to the price of a property, they have different meanings and are used for different purposes. In this post we will explain what is the difference between cadastral value and market value, what they consist of and how they affect you in the management or purchase of your home

The cadastral value is a value set by the public administration for tax purposes, such as calculating taxes such as IBI (Property Tax). This value has nothing to do with the price for which you could sell your house, but it is a reference used by official bodies to calculate taxes. To establish it, factors such as:

• The location of your home.
• Building characteristics, such as size, age or improvements made.
• The urban area where it is located.

Thus, the cadastral value does not tell you what your house is worth on the market, but it is important to know it because it affects the amount of taxes you will pay. If you want to know what the cadastral reference is, take a look at our post about the cadastral reference.

What is the Market Value?

The market value, on the other hand, is the price that a buyer would be willing to pay for your home at a specific time. This value changes according to the supply and demand of the real estate market, and is influenced by factors such as:

• The general economy of the country.
• The state of the real estate market.
• The characteristics of your property: location, state of conservation and if there is a lot of demand in the area.

In short, the market value is what you can expect to get if you decide to sell your house, and it can vary quite a bit depending on the time and economic context.

What is the Difference between Cadastral Value and Market Value?

The main difference between the cadastral value and the market value is that the first is a figure established by the administration for tax issues, while the second is the real price for which you can sell your house. Normally, the cadastral value is lower than the market value, because it is based on factors that do not always reflect the reality of the real estate market.

For example, the cadastral value is reviewed from time to time, but the market can change quickly. Thus, at any given time, you may find that the sale price of your house is much higher than its cadastral value.

Although the cadastral value does not reflect the price for which you could sell the property, it may have some relationship with the real price, especially in areas where the market is growing. This is because, when market prices rise significantly, administrations are likely to also review the cadastral value. However, these revisions are not as immediate or frequent as changes in the market.

It is important that you keep in mind that the cadastral value can affect other aspects, such as tax expenses and other fees.

How to Calculate the Cadastral Value and the Market Value

To know the cadastral value of your home, you can consult it in the Cadastre or request it from the town hall of the municipality where the property is located. This will allow you to have an idea of what you pay in taxes, but remember that this value does not always coincide with what your house is worth on the market.

The market value, on the other hand, is obtained by making a real estate appraisal. An agent or a specialized expert will make an analysis of your property and the market, taking into account the location, the state of conservation and the current conditions of purchase and sale.

At Espígul, we are experts in helping you calculate the cadastral value and the market value of your home. We advise you throughout the purchase process so that you can make informed decisions and get the best price for your property, adapted to the reality of the current market.